Prioritizing Immigration Reform

posted by Matthew Anselmo | 187sc
March 07, 2012

Last year I lived in Arizona for the polarizing discussion around SB1070, a law that requires immigrants to carry proper documentation at all times. The reaction from across the nation was mixed; the anti-illegal immigration crowd championed the legislation as a win for citizens, and the civil rights movement charged Arizona with racism. Although the true motivation for the law was purely political (Governor Jan Brewer used the legislation to win support from her base), it drove substantial misinformation around immigration. Diving into the data reveals some very interesting statistics. Not only is the cost to taxpayers negligible but undocumented workers drive down wages for employers, makes goods cheaper for consumers, and is one of the main sources of unskilled labor in the US.

Money drives decisions in Washington. Any legislation that has a positive dollar payout is bumped to the front of the congressional docket. This is precisely the reason why wedge issues like abortion and gay marriage are leveraged in the campaign season, but never legislated once government is in session. Regulating undocumented workers is bad for business, the economy, and price chasing consumers. Politicians understand immigration emotion with voters and leverage talking points as ammunition. Once elected, immigration is tossed to the back of the bus with all other wedge issues, ready to resurrect once election season returns.

According to the Pew Hispanic Center, America's employs around eight million undocumented workers, roughly 5.3% of the total workforce. Undocumented Workers only make up 3.7% of the nation’s population, and that number has been declining with the economic stresses facing the US. In Arizona, there were 150,000 less undocumented workers in 2010 than 2007, and Florida's population also decreased by 230,000 in the same time period. Across the US there has been a decline of one million undocumented workers from 2007 to 2010. Of the total number of undocumented immigrants in the US, only 58% originate from Mexico. Undocumented immigrants make up a small part of the population, disproportionate percentage of the workforce, and shrinks as national unemployment rises.

The two biggest issues cited when discussing immigration is cost to taxpayers and crime. Cost to taxpayers comes in the form of healthcare resources stemmed from emergency room visits. Recent studies place the liability of medical care around $5 billion annually, much less than the $50 billion incurred annually by uninsured Americans. Undocumented immigrants are ineligible for welfare, food stamps, social security, Medicare, or Medicaid. About five million undocumented workers are employed by taxpaying companies, who in turn provide payroll and income taxes on behalf of these individuals. These unclaimed tax payments to the government create a windfall of $8-$10 billion annually which more than covers the emergency room costs. Undocumented immigrants also pay sales tax, and as renters indirectly pay property tax. Crime rates are disproportionately lower for undocumented immigrants. The vast majority of incarcerations are violations of immigration laws, not violent crime. California is the largest undocumented immigrant state comprising approximately 35% of the state's population. Immigrants, however, represent 17% of the prison population.

Now, to be clear, I am not advocating undocumented immigrants be given the same workers rights as US citizens, or for wide open borders. This would disrupt the value equation provided by cheap labor and immigrants capacity to flow to the work. Undocumented workers should come and go as the market dictates. When jobs are not available the immigrant population shrinks, and the opposite as more companies expand. 50% of all produce workers are undocumented workers, as well as vast amounts of service workers in hotels, kitchens, and landscaping companies. Immigrants have a substantial impact on keeping cost cheap, which is then passed to the consumer. Wal-Mart is the retail king through low pricing. Many of these low price products are created by the hands of undocumented workers. Tougher immigration laws are bad for labor markets and business and will dry up campaign donations faster than Tim Pawlenty's run for president.